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With a proven track record for helping companies achieve critical cost reductions without sacrificing customer satisfaction, target costing provides managers and executives with the tools to survive and prosper in today‘s increasingly competitive market without raising prices on customers. Target Cost Management: The Ladder to Global Survival and S
"Target Costing is an essential tool for companies striving to achieve and maintain a position of true cost competitiveness."--Back cover.
What would happen if everyone in your company followed a disciplined approach to cost reduction? Go ahead -- imagine it. What would it look like? How can it be done? The answer -- smart cost management. Effective cost management must start at the design stage. As much as 90-95% of a product's costs are added in the design process. That is why effective cost management programs focus on design and manufacturing. The primary cost management method to control cost during design is a combination of target costing and value engineering. Target Costing Objectives: Identify the cost at which your product must be manufactured at if it is to earn its profit margin at its expected target selling price. Break the target cost down to its component level and have your suppliers find ways to deliver the components they sell you at the set target prices while still making adequate returns. Value Engineering: The connection to function: An organized effort and team based approach to analyze the functions of goods and services that the design stage, and find ways to achieve those functions in a manner that allows the firm to meet its target costs. The result: Added value for your company (development costs on-line with added value for your company; development costs on-line with selling prices) and added value for your customer (higher quality products that meet, possibly even exceed, customer expectations.)
Target Costing: The Next Frontier in Strategic Cost Management is the one-and-only reference of its kind, providing practical insights on using target costing to build a culture of excellence in your organization. Shahid Ansari, Jan Bell and the CAM-I Target Cost Core Group focus on the details and show how this strategic management process can provide your customers with the products they want, when they want them, at a price they can afford - and still earn your firm reasonable financial returns. The CAM-I group realized target costing was critical for success in our global economy and collaborated on this landmark work. Relying on state-of-the-art practices drawn from over 80 Japanese works, global best practices and personal experience, Target Costing describes the scope, framework, process and tools for implementing a robust and integrated target costing system.
Essay from the year 2007 in the subject Business economics - Controlling, grade: 1,3, European Business School - International University Schlo Reichartshausen Oestrich-Winkel, course: Vertiefung Controlling, 8 entries in the bibliography, language: English, abstract: Contemporary times are characterized by quick, dynamic, and continuing changes in the economy. Therefore, companies have to adapt flexibly and innovatively to these changes in order to stay competitive and cope with the increasing pressure of competition. In particular, Asian and East-European competitors gain market share by offering products of better quality than in earlier times and for lower costs. Under these conditions, costs represent a fundamental factor for the success of western companies. Accordingly, management and employees have to fully exploit the potential that cost management and reduction measures offer. However, costs are not the only buying decision criterion. Customers expect products with high quality but for a low or moderate price. Correspondingly, companies have to adjust their new product developments and production systems to market requirements. This can be achieved by the Target Costing approach, a tool that is applied in more and more companies. Therefore, the aim of this essay is to explain the goals and method of Target Costing. It starts with giving some background information about Target Costing and its historical development. Chapter three describes the goals of Target Costing. Then, the Target Costing process is explained in detail. Finally, this essay concludes by discussing that Target Costing is an effective cost management tool for developing new products according to market requirements. ...]
The problems inherent in the traditional design-bid-build procurement method often lead to the adversarial working relationships within the construction industry. Target cost contracts, accompanied by a gain-share/pain-share arrangement serving as a cost incentive mechanism, have emerged in the United States, the United Kingdom, Australia and Hong Kong with the aim of achieving better value for money and more satisfactory overall project performance under a collaborative working relationship. This book presents the underlying principles, practicalities and a series of short case studies of applying the target cost contracting strategy. Principles begin with the fundamentals then cover the development of target cost contracting in major countries/cities, definitions of target cost contracting, perceived benefits, potential difficulties and critical success factors for implementation. Practices include the target cost contracting approach and process in general, the key risk factors, risk assessment model, risk allocation and risk mitigation measures for target cost contracts in particular, together with a conceptual framework for the performance measurement of target cost contracts. Several short real-life case studies from the United Kingdom, Hong Kong, Australia and New Zealand are provided for further illustration. The book will appeal to a wide spectrum of readers from industrial practitioners to undergraduate students, researchers and academics interested in construction contracts and procurement methods.
Four questions determine whether a company is using interorganizational cost management. Does your firm set specific cost-reduction objectives for its suppliers? Does your firm help its customers and/or suppliers find ways to achieve their cost-education objectives? Does your firm take into account the profitability of its suppliers when negotiating component pricing with them? Is your firm continuously making its buyer-supplier interfaces more efficient? If the answer to any of these questions is ""no"", your firm risks introducing products that cost too much or are not competitive. The full potential of the supply network can be realized only when the entire supply chain adopts interorganizational cost management practices. Competitive pressure has led many firms to try to increase the efficiency of supplier firms through interorganizational cost management systems, a structured approach to coordinating the activities of firms in a supplier network to reduce the total costs in the network. It is particularly important to lean enterprises for two reasons: Lean enterprises typically outsource more of the added value of their products than their mass producer counterparts. Lean enterprises usually compete more aggressively and must manage costs more effectively. Interorganizational cost management can reduce costs in three ways: through product design, through product manufacture and through cooperative approaches between buyers and suppliers to build smoother interfaces. However, more than just cost management must cross interorganizational boundaries. Suppliers are also a major source of innovation for lean enterprises. Successful supplier networks encourage every firm in the network to innovate and compete more aggressively. Read this book to learn to manage the supply chain to forge competitive advantage while reducing costs.
An accessible, practical survey of cost management methods Essentials of Cost Management provides an unbiased survey and explanation of the cost management approaches and methods currently available for immediate application in day-to-day activities. Rather than advocate a particular method, this book assists readers in choosing the best approach or blend of cost management strategies to address specific business problems. The expert authors also discuss cutting-edge topics such as target costing, capacity management, and activity-based costing/management.
Production and manufacturing management since the 1980s has absorbed in rapid succession several new production management concepts: manufacturing strategy, focused factory, just-in-time manufacturing, concurrent engineering, total quality management, supply chain management, flexible manufacturing systems, lean production, mass customization, and more. With the increasing globalization of manufacturing, the field will continue to expand. This encyclopedia's audience includes anyone concerned with manufacturing techniques, methods, and manufacturing decisions.